The Darkest Side of Monopsony: The South Korean Case

“Chaebols”, large business groups controlled by founder families, are usually considered a crucial ingredient of South Korea’s economic miracle. But after a process of consolidation, big chaebol firms such as Hyundai established exclusive supply chains with suppliers of parts and components and began to engage in price squeezing and intellectual property extortion in bargaining with its suppliers. 

Read more

How to Interpret Financial Market Movements to Predict the Impact of Coronavirus on GDP

Equity markets in the EU and US dropped by as much as 30 percent, which means that investors have revised downward their estimate of future profits by as much as 30 percent. This leads to an estimate that GDP growth over the next year will be down by 2.6 percent in both the US and the EU. However, investors expect the current crisis to be shorter than the 2008 global financial meltdown. 

Read more

“Monetary Awards Are Not the Only Reason Why Whistleblowers Report Corporate Malpractice”

At the SEC, Jordan Thomas had a leadership role in developing the program to protect and reward employees who report corporate wrongdoing. Now, he is a lawyer who exclusively represents SEC whistleblowers: “The award is not the only driver, nor the primary driver, but it is an important factor to help people feel comfortable in coming forward”.  

Read more

Elon Musk Wants to Get Paid. He Will Get His 2019 Bonus Thanks to an Accounting Magic

In March 2018, Tesla’s Board of Directors granted Musk a potential bonus of 20,264,042 stock option awards under a  plan that uses “adjusted EBITDA” as one of its metrics. According to general accounting principles, Tesla recorded a 2019 net loss of $862 million, but thanks to using different accounting principles this loss became an adjusted EBITDA profit of $2.985 billion.

Read more

How US Regulators Allowed Google and Facebook to Become Dominant

The UK’s Competition and Markets Authority recently criticized Google and Facebook’s excessive market power. American regulators, on the other hand, have allowed them to consolidate their influence with almost no restrictions, and the Justice Department’s chief antitrust enforcement official has recused himself from the Google investigation because he used to be a Google lobbyist.

Read more

How Regulators and PwC Fooled Reporters—Again

Is the PCAOB really investigating PricewaterhouseCoopers (PwC) for its role in the Mattel auditing mess? I may be wrong, but I seriously doubt it. Since the PCAOB and the SEC are captured by the Big Four auditing firms, regulators use the same PR tactics to preserve their own—and the audit firms’— survival.  

Read more

Over 60 Leading Finance Economists Ask SEC to Revise the Shareholder Voting Draft Reform

The new regulation that Security and Exchange Commissioners voted in November doesn’t fix proxy advisory industry duopoly problems, but it actually makes them worse: A group of scholars from major American universities filed a comment to ask the SEC to amend the proposed reform of public companies corporate governance.    

Read more

New Rules on Shareholder Voting Debate: Best Readers’ Comment

The draft SEC regulation on shareholder proposal and proxy advisory firms will curb the initiative of individual shareholders to improve corporate governance and transparency of public firms, a ProMarket reader writes in the comment he sent to the SEC. “Progress on best practices often depends on the initiative of a few.” 

Read more
1 2 3 10